The evolution of measurement technologies

Last year, Stockpile Reports flew thousands of drone flights and converted 12 million images into 3D reports. Auto-detected piles were digitised for their attributes, including accurate measures of volume. Based on this work, several trends emerged and are summarised in this paper. However, the field is still in its formation in an industry that is lagging in technology adoption. On the cusp of massive disruption, industry leaders are starting to digitise their assets, beginning with inventory measurements and advancing to broader operations. This paper will explore the evolution.

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Of bins and bunkers

The day-to-day life of a cement producer largely occurs within the bins and bunkers that feed the plant. Measuring more frequently helps ensure that supply is readily available and that logistics will be smoother all the way to the delivery site. Until recently, however, accurate measurements inside those bins and bunkers were hard to come by. Low confidence led to inventory overages and routine monitoring was difficult.

With the advent of fast and accessible measurement technologies, a new era of management is now possible. Beyond just measurement, materials management becomes a reality. Here, systems can intelligently interpret data and convert data insight into action.

For example, data alone might inform operators of the absolute weight of cement in Bunker B, but an intelligent system can proactively alert them when a threshold of inventory has bottomed, telling the operators just how much more to produce, based on sales forecasts and orders. This creates meaningful connections between production and sales and timing delivery by the job.

Leaders, such as Ozinga and Irving Materials, are now balancing sales, production, and operations, which has become as core to their business as monitoring the mix of cement, aggregates, and water. As effort and cost falls, more frequent measurements are a reality to smooth the dreaded inventory adjustments, financial spikes, and write-offs.

Trend 1: More frequent measurements: annual becomes hourly/continuous

Stockpile Reports has found that daily measurements, presented in a pile-centric dashboard, allowed managers to make adjustments on a day-to day basis, flattening out spikes and leading to smaller amounts of ‘just-in-case inventory’ on the ground. They were also seeing which site or piles needed attention, addressing those earlier. Viewing how a pile changes over a week gave them new visual insights that older, infrequent images could not. By removing the barriers to frequent and cost-efficient pile measurement, leaders were gaining a competitive advantage, allowing them to grow their businesses with more control and less waste and storage cost.

Stockpile Reports predicts that this will lead to more frequent measures until – in the near future – real-time data will be available, wherever and whenever it is needed.

Trend 2: Evolving measurement methods

Half a million drones have been registered with the Federal Drone Registry since December. Over 700 million iPhones are in use in the world. These accessible technologies are driving adoption of widespread measurement methods. It should not matter whether we take a photo from a camera in the air, on a plane, on a drone, or suspended on a wire: the technology processing should make sense of what the camera captures and turn it into meaningful data.

Stockpile Reports tracks aerial and ground measures year over year and is seeing a trend from fixed wing planes toward drone flights and ground measurements. Last year saw a 40% increase in measurements captured by drone. Today, iPhone-based measurements are growing dramatically and, within the next three to five years, it is feasible that producers will have instant data on all their stock levels via autonomous drones, truck-mounted cameras, and wearable cameras.

The sci-fi effect of witnessing 3D image reconstruction and photogrammetry can be difficult to comprehend in a day-to-day operation, but labour-intensive, elaborate systems are no longer required to obtain accurate measurement. Stockpile Reports measures accuracy levels within 2% of LiDAR and received an award from the American Association of State Highway and Transportation Officials (AASHTO) for its combined ease and accuracy last year. After six months of measurements, the iPhone-derived volumes were coming in within about 1.6% of their conventional measurements.

Trend 3: Shared data to inform more people and processes

The very act of moving assets from one location to another is a costly part of the business. Some customers report substantial losses – even as high as 30 – 40% – during transit. Data shared along the supply chain has the potential to end disputes and smooth transitions between locations. The new wave of innovation is pushing towards the middle space between production and delivery. Therefore, integration and communications will naturally expand when information is shared between departments, locations, and companies.

Companies can no longer “operate without paying attention to what is happening in the middle between our customers and us,” said an executive from one leading US building materials company. “There can be losses at each touch point, whether moving by truck or barges. There has not been a good understanding between accounting and the field. There is a knee-jerk reaction that we are losing material, when the number is not what they think it should be. We need to understand if there really is a percentage loss at each touch point, before we call it a problem. It may be a problem of inconsistent measurements.”

Stockpile Report’s largest customer experienced cost-saving innovation by using a drone to make sure that the job sites were on the right path. Precision metrics may not be needed to ensure an operation is on the right track, so doing a quick check more frequently along the product’s journey may mitigate these losses. One day, spot-checks will be the mutual agreement of both provider and recipient, whether a walk-around or drone flight for the job site or order transfer location.

The traditional standard practice of estimating inventory volumes is that, when material is dropped off, the recipient is handed a ticket stating volume and/or weight. When that data is put into inventory, a conversion factor is used. This results in inconsistencies and erroneous inventory baselines for any given pile, with opportunity for error at each stop, compounding the problem. There is a massive potential for savings from a programme of more frequent measurement along the way.

At some point, real-time data will seamlessly flow into all company systems: ERP, production, sales, and finance. All parts of a company will operate with full knowledge of what is on the ground, at all times.

Impact on the industry

The industry may have been lagging in technology adoption and digitalisation, but now data is at its fingertips – and now they have even more than they know what to do with. The challenge will be to apply the technology and data to the right business problem. Silos of different types of mixtures and a huge scale house need to know exactly which mixture is in which tank for the slurry. What if the same precision and monitoring were applied to the rest of the pre and post-production stages? It is possible to achieve no-touch inventory when the right applications of technology are incorporated. All that is left is review and approval. This can dramatically reduce effort, time, and cost: realistically up to 90% savings can be achieved.

About the author: David Boardman is the Founder and CEO of URC Ventures and Stockpile Reports.